In the Wall Street Journal this week, Jonathan Clements pointed out one of the flaws on a 4% distribution rate on your retirement portfolio.  

The typical household headed by a 55 to 64-year-old has less than $90,000 in savings.  So, a 4% withdrawal provides $3,000-$4,000 of income each year-very modest.  So, how do you stretch those savings for 20-30 years?

Jonathan offers a couple of solutions:

• Delay taking Social Security.  You'll boost your income by 25% waiting until your full retirement age.  Most retirees take benefits at age 62 right now.
• Retirees with modest savings should look at income annuities for a portion of their retirement portfolio.
• Think about retirement in two acts, the period until age 85 and the period after.  At age 65 plan on spending down 1/20th of your portfolio, 1/19th the second year and so on.   If you are still alive at age 85 consider annuities or reverse mortgages to supplement income.